Research: Paying for Green Remains Tough

Despite energy-efficiency and air-quality concerns, homeowners are questioning whether to invest in upgrades for green remodeling projects.

April 25, 2014
Research: Paying for Green Remains Tough

Professional Remodeler named Meadowlark Builders a Gold Award winner for Green Remodel for this project submitted to the 2013 Design Awards.

Are homeowners growing tired of the additional costs surrounding green and sustainable remodeling projects? The rising cost of green or sustainable remodeling features combined with the long-term return on investment continues to hinder these types of remodeling projects, according to remodelers who responded to the Professional Remodeler Green Remodeling survey. This is the seventh green/sustainable study conducted since 2007 and results have been tempered in the previous three surveys.

Homeowners remain hesitant to pay a premium for green remodeling products and services, which has been the case for the past few years. Seventy-five percent of remodelers reported that “consumers are not willing to pay a premium” for green or sustainable remodels. Nearly 50 percent of respondents said, “consumers are not willing to pay a premium” as a “very significant” factor. Another factor hindering green or sustainable remodeling projects is “insufficient return on investment,” which was cited as an obstacle by 65 percent of remodelers.

“Cost is the number-one factor. Customers want green or sustainable products but they do not want to pay for the upgrades,” says one remodeler.

“No matter how we explain why we are using new energy-efficient products, it still boils down to the overall cost of the project,” adds another remodeler.

Forty-three percent of remodelers reported green features do indeed help them sell remodeling projects, and 41 percent market their remodeling company as “green” similar to the results from our previous Green Remodeling surveys.

Want versus need and cost

As in years past, getting the client to pay enough to cover the added cost of green or sustainable features remains a significant challenge to remodelers. Just over 70 percent of remodelers said clients will pay up to 5 percent or more for green features. This is down from 80 percent last year, and closer to the 75 percent recorded two years ago. Only 15 percent of homeowners are willing to pay more than a 5-percent premium for green or sustainable remodeling work, down slightly from 20 percent recorded last year.

Fifty-one percent of remodelers indicated that adding green or sustainable features to a remodeling project increases the project’s cost by more than 5 percent. Just under 50 percent of remodelers indicated clients are willing to pay at least 5-percent more for green remodeling features.

METHODOLOGY

168 remodelers responded to the survey via the Internet.Participants were a random sample of subscribers to Professional Remodeler print and digital editions.

“Getting customers to pay for green…they all want to be green until it costs them more money,” says one remodeler.

Local, state, and federal government tax credits and rebates still drive some green projects by offsetting costs; however, the numbers have plateaued according to remodelers, who indicate many programs are coming to an end if they don’t already cease to exist.

Sixty percent of remodelers indicate homeowners are taking advantage of government incentives for green improvements. This number is similar to the last two years. Just 26 percent of remodelers indicated homeowners are using the tax credits or rebates on more than 10 percent of projects, which is similar to the number recorded in last year’s survey, but down from 38 percent recorded two years ago.

Energy efficiency still a concern

Similar to previous surveys, energy efficiency remains the top concern for homeowners. Sixty percent of the remodelers who responded to our survey indicated their clients remain “very concerned” about energy efficiency while 70 percent were at least “somewhat concerned.” Energy efficiency and indoor air quality are the only two factors that are a concern for more than half of homeowners, according to the remodelers surveyed. Last year, water efficiency was the concern of greater than 50 percent of homeowners; however, it was a concern to only 43 percent of remodelers’ clients in this year’s survey. Nineteen percent of remodelers said their clients were “very concerned” about the environmental impact of the products used for their projects.

Similar to previous years, remodelers are still diversifying their business to either enter or maintain their position as part of the energy-efficiency remodeling market by specifically adding energy audits as part of their remodeling services. Forty-three percent of remodelers indicated they now offer energy assessments as part of their remodeling business. On par with our prior surveys, 81 percent of respondents indicated they only perform energy audits when it is profitable to other aspects of their business.

Products and remodeling methods focused on energy efficiency continue to be the most popular attributes that remodelers are implementing in green or sustainable remodeling projects. Energy-efficient windows were used by 65 percent of remodelers on all their projects and 97 percent used energy-efficient windows on at least some of their projects. Enhanced insulation, energy-efficient appliances, and energy-efficient lighting were all used by more than 90 percent of remodelers in at least some of their green or sustainable remodeling projects. PR

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